| Adam Smith was the first person to see
the importance of the division of labor. He gave us an example of the process by
which pins were made in England. "One man draws out the wire, another strengthens it, a third cuts it, a fourth points it, and a fifth gives it a head. Just to make the head requires two or three different operations. The work of making pins is divided into about eighteen different operations, which in some factories are all performed by different people, though in others the same man will sometimes perform two or three of them. " Ten men, Smith said, in this way, turned out twelve pounds of pins a day or about 4800 pins a worker. But if all of them had worked separately and independently without division of labor, they certainly could not have made twenty pins in a day and not even one. There can be no doubt that division of labor is an efficient way of organizing work. Fewer people can make more pins. Adam Smith saw this, but he also took it for granted that division of labor is itself responsible for economic growth and development and it accounts for the difference between expanding economies and those that stand still. But division of labor adds nothing new, it only enables people to produce more of what they already have. |